Why You're Blind To Innovation

By Tom Agan

The Rolling Stones got it right. Let "No Expectations" be your credo and instead of straining to find innovation, you'll wonder how you ever missed it before.

If you’re blind as a bat when it comes to seeing innovation, you’re not alone. Top people at leading companies often fail to respond to new innovation even as it threatens their very existence. There’s the U.S. auto industry’s lack of response to the onslaught of Japanese cars in the '80s, or IBMs failure to shift from mainframes to PCs, an oversight that nearly sent them into bankruptcy in the late '90s.

More recently Motorola, RIM (the maker of BlackBerry), and Nokia--once hot companies attracting the world’s best talent--have not been able to successfully respond to Apple’s iPhone, despite all three being pioneers in the evolution of mobile devices with Motorola even credited as the inventor of the handheld cellphone. Early success at innovation hasn’t saved any of them from Apple’s offensive; so much for first-mover advantage.

How could that possibly happen?

One of the many theories cited is financial: Companies resist innovation because it appears to be less profitable. Certainly that could have been the case for IBM since PCs and servers were initially far less profitable than their mainframe business. But Apple mints far more profits from its lower-volume yet expensive iPhone than Nokia does from its high-volume and less expensive more basic devices.

Another reason cited is that existing business models don’t have the capability to deliver the new technology; they lack the design, sales, manufacturing, marketing, branding, and other capabilities needed to respond. While it might be true that the U.S. auto industry lacked the manufacturing discipline, motivated workers, and processes like Total Quality Management needed to compete with the Japanese car invasion of the 1980’s, there’s evidence to the contrary that limited capability blinds companies to innovation. For instance, when the iPhone hit the market Motorola, Nokia, and RIM clearly had the capability to design, develop, manufacture, market, and distribute smartphones since all three had already been highly successful doing so with an earlier generation of products.

So what gives if the two most common explanations for failure to respond to innovation--financial disincentive and lack of capability--don’t always hold up? How then did Motorola, Nokia, and RIM end up in such dire straights--Motorola finally having to be rescued by Google.

It all comes down to guys in gorilla suits. We often cannot see what we don’t expect to see. One classic experiment clearly demonstrates this concept. Subjects were given a task, just like all of us have many, many tasks to complete everyday at work, to watch a video of people passing cards and to count the cards. In the middle of the video a guy in a gorilla suit walks in, stops for a moment, and then exits. Afterwards, when the subjects were asked if they noticed anything unusual, half or more didn’t remember seeing the gorilla at all.

On one hand, seeing only what we expect to see while completely missing other stimulus even when it’s in plain sight serves a valuable function. Our expectations--or paradigms--allow us to filter out extraneous information in order to focus on what’s important giving us the ability to take shortcuts and make faster decisions. This phenomenon worked well for our ancestors when confronted with a pouncing tiger and still serve us today when, shopping list in hand, we are confronted by thousands of items on the supermarket shelf.

But paradigms have a downside. They keep us from seeing anything new that doesn’t fit our beliefs. They keep us from learning. For thousands of years we believed the earth was flat. When Copernicus proved otherwise in 1543, we fought against the idea for another few hundred years.

Motorola, RIM, and Nokia failed not because of lack of potential profits or capabilities. They could literally not see the innovation--or its implications--that Apple brought to market. The iPhone did not match the paradigm formed from their prior success of what a successful smartphone should be. And given how quickly competition advances, by the time they saw the light, it was too late.

So what does it take to see past old paradigms to innovation, to see the gorilla in the room.

After 25 years of working with the world’s leading companies on successful innovation which included spearheading an innovation best practices study with first-ever findings, I have five tips to pass along that will facilitate the “seeing” process:

Stop working. Focusing on a task--counting cards (think gorilla experiment) or writing emails non-stop--hinders your ability to see something new and surprising. While work still needs to get done, step back often and observe. Pay attention to customers, competitors, and the quirky fringe of the culture where new ideas get traction.

Follow bread crumbs. People learn best in increments starting from a place they’re familiar with. So to overcome the inherent difficulty of seeing something new--to grasp innovation--try recreating the steps your competitor took to get from point A (the current state of the art) to point B.

Get real. One natural bias that keeps us from seeing innovation is that most people tend to be excessively optimistic about their future, a fact borne out by research and reflected in the notion most of us have of being above average, which couldn’t possibly be true. Those who see the world with stark honesty--that small minority of realists--tend to have a more accurate picture of opportunity. Seek out their advice.

Embrace annoying people. You know the ones, whose comments at meetings drive everyone up the wall. By being wired to challenge conventions and assumptions, they’re more likely the ones who see the new paradigm emerge first.

Set up your safety nets. Since innovation fails more times than not, successful innovation is largely determined by how well you manage failure. Learning from mistakes is key; in fact, companies that hold regular debriefs after the launch of a new product average 100 percent more revenue than those that don’t. Make it safe to fail when it drives progress to the goal you want to achieve.